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Why a Gift Card May Be Better than Cash

If you find yourself, as many do, out of time to purchase thoughtful gifts, perhaps you are now contemplating giving a gift card or perhaps some cash. From CNN (summarizing recent research by Dan Ariely, among others), here’s a reason to opt for former option:

In our daily lives, a lot of purchases have the element of guilt along with them, Ariely said. If you give cash or a credit-card-sponsored gift card that can be used anywhere, your friend may be tempted to use it on groceries or gas or some other necessity that doesn’t make it feel very “present”-like anymore.

Ariely’s intuition is that if you give a gift card that must be used at a particular store, restaurant or entertainment venue, it may eliminate the guilt a person would feel about spending money to treat herself or himself. In fact, you’re essentially creating an experience for the person by coaxing them into going to a particular place that they might not otherwise go.

A spa gift certificate is a popular example, Ariely said. “If you can only spend it on things that you would otherwise not allow yourself to buy, then it’s more valuable,” he said.